In the past week, editorial boards from greater Minnesota newspapers have been weighing in on state actions that have significantly reduced their communities’ state funding dollars. Programs like LGA and Market Value Credit (MVC) help alleviate property tax disparities that exist between rural Minnesota and wealthier communities, which in turn strengthens the economic viability of the state as a whole. These programs also help communities provide essential services like police, fire protection, libraries, parks, and safe roads while keeping property taxes affordable. With the state having cut LGA by over $1 billion since 2002, communities that receive LGA are sacrificing quality-of-life services and asking property taxpayers to pay more for less, causing editorial writers to question the direction in which lawmakers are taking greater Minnesota.
The Mankato Free Press is concerned that LGA cuts will negatively impact the business climate in rural Minnesota, which is dependent on affordable property tax rates in order to attract and retain small businesses.
What many may not realize is that local government aid cuts don’t just hurt taxpayers by shutting down libraries on weekends, or cutting police and firefighters: The loss of local government aid raises property taxes not only on homeowners, but more importantly on small business owners who pay higher property tax rates.
This trend is making it more expensive to do business in outstate Minnesota. Property tax rates in outstate Minnesota have become much higher than in the metro area. Albert Lea, for example, has a 45 percent property tax rate while Bloomington has a 27 percent tax rate. There is little incentive for a new business to consider Albert Lea when taxes are almost half in Bloomington.
The Ely Timberjay points to the upcoming election as a turning point for Minnesota’s quality of life, which in the paper’s opinion hinges on strong services and a fairer tax structure:
We need a balanced approach to solving the state’s budget problems. That’s the conclusion of our state economist, and it’s the view of a bipartisan commission on the budget as well virtually every past governor, from both sides of the political aisle.
The question Minnesotans will need to ask themselves this fall is whether they are interested in doubling down on the Pawlenty vision of a low tax, low service, low wage Minnesota, or whether they prefer a middle ground that allows the state to restore funding to schools and local governments, restores a fair and progressive tax structure, and enhances the quality of life for all Minnesotans.
Citing the fact that city aid programs are only 3.4 percent of the state’s general fund but absorbed 16 percent of the 2010 budget cuts, the Worthington Daily Globe cautions candidates for governor to be more specific about their budget plans and vision for city aid programs:
We have long been opposed to LGA cuts, and the reason is simple. The program helps communities with lower tax bases, such as Worthington and many others across Greater Minnesota, have access to essential services at prices affordable for property taxpayers. It’s therefore no coincidence that as LGA has been reduced, local taxes have increased—and services reduced, as well, in several instances.
…In an election year, we can anticipate any or all candidates coming forward with ideas on how to reduce the tremendous deficit. Many will likely tout what may appear to be dramatic reform plans. But voters, as well as the media, owe it to themselves to learn how each suggested cut affects the budget as a whole. This way, we can make sure—among other things—that 3.4 percent doesn’t again translate to 16 percent.